Brexit Bulletin: Back to Square One?
Brexit Bulletin: Back to Square One?
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Minutes into the fourth round of Brexit talks, which started in Brussels on Monday, Britain’s Brexit Secretary David Davis shattered the illusion that the U.K. was ready to play by the EU’s rules on the divorce bill. Whatever Prime Minister Theresa May said in Florence last week about meeting the U.K.’s financial commitments, Davis made it clear Britain will only pay up if it gets the final deal it wants.
“It’s obvious that reaching a conclusion on this issue can only be done in the context of, and in accordance with, a new deep and special partnership with the EU,” Davis said, standing alongside EU chief negotiator Michel Barnier, who has made it clear the bill needs to be sorted first.
Even before Davis arrived in Brussels, European affairs ministers briefed by Barnier were skeptical that EU leaders will be able to sign off on talks moving on to the trade deal Britain wants in October, according to people in the meeting who declined to be named.
For that to happen, leaders need to see “sufficient progress” on the divorce price tag and other issues including the Irish border. European ministers discussed the possibility that in October leaders could offer encouraging words—reflecting their view that May’s Florence speech was a welcome shift in tone—but refuse to move on to the next stage, Bloomberg’s Ian Wishart reports.
Davis’s comments highlight just how far apart the two sides remain, as they are still battling over the sequencing of talks—something that was meant to have been settled in June. On Friday May offered to pay into the EU budget for two years, which amounts to about €20 billion (£18 billion, $24 billion), plus additional commitments that officials in Brussels estimate run to another €20 billion. This still falls short of what the EU is after.
Davis called for pragmatism and said there was “no excuse” for not making headway this week, striking a more combative tone than his boss.
While talks get underway again on Tuesday, European Council President Donald Tusk, who has said he’d like to see Brexit reversed, meets May in London.
Brexit Latest
Derivatives Deal | The Bank of England warned that an agreement is needed as part of any Brexit settlement to protect the validity of £20 trillion ($27 trillion) of derivative contracts and avert market disruption.
ECB Warning | ECB President Mario Draghi was less specific: the risks from Brexit are “quite complex to assess,” he said on Monday, and will depend on the shape of the final deal.
Labour’s Brexit | The Labour Party avoided debates on Brexit at its conference in Brighton, in what could be a politically astute move by leader Jeremy Corbyn. Still, Brexit spokesman Keir Starmer set out his views in a speech and said remaining in the customs union could be a long-term solution. Shadow Chancellor John McDonnell pledged to give his Tory rivals “the political battle of their lives” if they used Brexit to roll back workers’ rights.
Operation Boris | May’s office has been making preparations in case Foreign Secretary Boris Johnson resigns, The Times reports. Lawmakers have received calls from the whips’ office assessing support for Johnson, the newspaper says. Johnson is in eastern Europe this week, and was on his best behavior in Prague yesterday, sticking firmly to the script.
And Finally...
The Brexit bus is back. A London-based fintech startup has leased the campaign bus that helped deliver victory for Leave and is using it to promote its European expansion. Monese, which lets people sign up for current accounts on their mobile, says users of its service would be permitted to transfer as much as €350 million between U.K. and euro zone accounts for no fee.
The message—which echoes Vote Leave’s infamous pledge to repatriate a similar amount each week for the National Health Service—will be emblazoned on the bus in English and French, Bloomberg’s Nate Lanxon reports.
To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Andy Reinhardt